The Australian Chamber of Commerce and Industry (ACCI) has expressed grave concern at proposed changes to the Privacy Act, before the Senate this week, which would have major unintended consequences for business.

Australia’s largest and most representative business network reiterated its serious concerns about the inclusion of a new statutory tort for serious invasions of privacy.

The statutory tort would create significant legal issues and incentivise class action lawfare, and is inconsistent with approaches taken by like-minded countries, such as New Zealand, Canada and the United States.

“We support the Government’s review of Australian privacy law to ensure they are fit-for-purpose in our modern economy,” said ACCI Chief Executive, Andrew McKellar.

“However, this should not be used as a vehicle to introduce measures which are anti-business.

“The tort will operate separately to the existing Privacy Act framework. This means that the ‘employee records’ exemption will not apply.

“This will cause significant issues for employers, who not only have numerous legitimate reasons to use their employees’ personal information, but in many cases are required to do so to comply with their various obligations under workplace, and other, laws.

“Plaintiff law firms and litigation funders have long called for a statutory tort, which would significantly simplify the process of commencing class action litigation in relation to privacy breaches.

“Class action litigation is possible for serious data breaches under our existing laws. These proposed laws before the Senate will do nothing more than expand the risk of legal exposure across more types of breaches and encourage speculative claims to be made by well-resourced litigation funders, including for mental distress, where evidence of actual harm will not be required.

“The class action industry is a multi-billion-dollar sector, which profits off speculative claims. This is just another step along a worrying trend, which is creating an increasingly risky environment for business of all sizes to operate in.

This may have a flow on impact for insurance premiums, business operations and prices which are ultimately passed on to consumers”, said Mr McKellar.

“The statutory tort will particularly hurt small businesses, who have less physical and financial resources to ensure they are protected from speculative claims from well-funded plaintiff law firms.

“Concerningly no Regulation Impact Statement has been undertaken to assess the full impact of these laws, and stakeholders were given only a month by the Senate inquiry to consider the Bill before submissions were to be made”.

“ACCI urges the Senate to remove those provisions related to the statutory tort from the broader privacy law amendment bill, so that further consideration can be undertaken”.